Financial News & Wine investment process : Posted by Will Lyons on October 26, 2015
Fine wine has always been a tradable commodity. We know that the ancient Greeks and Romans regularly shipped it with olive oil and in the medieval period such was its importance to the city of London that an association of wine merchants was created called The Vintners’ Company as far back as 1363 – its headquarters can still be found on the north bank of the Thames.
But it wasn’t until the 19th century, with the invention of bottles and corks, that speculation really took off. Then fortunes were made and lost as wine merchants speculated on harvests and the changing prices of fine wine.
In the 21st century fine wine has provided a reliable long-term investment, outperforming inflation and, in some cases, equities. Relatively easy to trade, it also benefits from being a perishable item so any gains are not subject to capital gains tax. According to Liv-ex, the London-based fine-wine exchange, the long-term compound average return for a portfolio of Bordeaux fine wine, based on its Investables Index (which tracks over 200 wines from 24 top wine estates) is around 12% a year.